Apple’s Earnings Show Highest Profit in History
Apple's final quarterly earnings report state that although they broke a few records,they were still disappointed.
Apple released its quarterly earnings report on Tuesday, and it exceeded all of our expectations (if you’re following AAPL at all recently). First things first, Apple’s profits indicate the company is doing well. Yet, it is the best of times and the worst of times.
They claim a mind-boggling $18.4 in profit on $75.9 billion in revenue in the last quarter. This, mind you, is the highest recorded profit in a quarter by any corporation in history. The number is higher than the $18 billion in profit recorded during the same time last year.
The Pao Alto-based company sold just about 74.8 million iPhones (iPhone 6S and 6S Plus) in the quarter. 300,000 more iPhones were sold as compared to the same time last year. The average sale price for the iPad, iPhone ($690, up $3 YOY) and Mac was a record high increasing Apple’s margins to 40.1%. Also, the iPad accounts for almost 85% of the tablet market share in the U.S.
However, there was just an increase of 0.4% in sales of the iPhone 6S and 6S Plus, the lowest ever since the product’s launch in 2007. This is something to be concerned about, as iPhone sales are Apple’s biggest revenue driving factor. Apple forecast the company’s first ever revenue drop in more than 13 years considering the growth percentage of iPhone sales.
Apple also reported than more than 60% of people using an iPhone before the launch of the iPhone 6S and 6S Plus had still not upgraded to the newer models. However, there are more than 1 billion active iOS users in the past 90 days. That’s almost 1/7th of the world’s population combined!
Apple’s Services, including iCloud, AppleCare, App Store and Apple Pay saw a growth of 26% YOY to $6.05 billion. And, as usual, Apple did not report exact Apple Watch and Apple TV sales in their report, however, it can be safely assumed that it is not that high but not disappointing. However, they did say that ‘Other Products’ which include the Apple Watch and Apple TV accounted for $4.3 billion in revenue, a growth of 62% YOY. “Apple TV had its best quarter by far," said Tim Cook, CEO of Apple.
In the next quarter, Apple projects a revenue of $50-$53 billion with a margin of about 39%-39.5%. This is down from the $58 billion in revenue when compared to the same period last year. Along with this projection, Cook estimates the operating expenses to be in between $6-$6.1 billion with other income of around $325 million at a tax rate of 25.5%.
